By Sudheer Nagavarapu
Years before I started advising companies on where to locate their Indian operations, I was on the other side of exactly this decision. As a director of Click & Buy Services India — the Indian arm of Deutsche Telekom’s T-Systems group — I was part of the team deciding where, and how, to stand up an offshore testing and development center for the parent company. Everyone around the table wanted to start with “Which city is best?” We started there too, and it turned out to be the wrong question.
The Decision That Mattered More Than the City
The choice that actually shaped the outcome wasn’t Hyderabad versus Bengaluru. It was whether to build a new entity from scratch or take over the existing Click & Buy India business, which had already been operating in the country for roughly a decade. On paper, T-Systems dwarfed the local entity in every respect: global reach, capital, brand recognition across Europe. None of that mattered to the engineers we were trying to hire in Hyderabad.
What mattered was that Click & Buy India had a hiring history candidates could look up. A large German enterprise that local IT professionals had never heard of read as an unproven, experimental venture that might not last three years, however deep its parent’s pockets. An existing local entity, even one a fraction of the parent’s size, read as stable.
We built on the existing entity rather than starting clean, and it cut real months off the ramp — the export-oriented-unit registrations that would otherwise have taken around six months to complete were already in place. That’s a version of the location decision nobody puts in a slide deck: Sometimes the deciding factor isn’t the city at all. It’s whether you’re walking in with a name candidates already half-trust.
U.S company SplashBI, a data intelligence platform company headquartered in Duluth, Georgia, yesterday inaugurated its Global Capability Centre (GCC) at VSD Tech Park in Hyderabad’s Financial District.
Photo courtesy of SplashBI and EIN Presswire
Once the Entity Question Was Settled, the City Question Got Mechanical
The city comparison that followed is close to what I now watch clients work through, whichever advisor they’re using. Hyderabad ends up the practical choice more often than Bengaluru’s reputation as India’s top IT market would suggest, but not because Bengaluru is a weaker option. For straightforward software product and engineering roles it’s usually the deeper market. It’s that the same seniority band costs meaningfully less in Hyderabad, a gap the recruiters we’ve worked with over the years still describe as broadly consistent. On a 30- or 50-person build that’s a rounding error. On a 300-person center, it changes the shape of the P&L for the first three years.
Cost isn’t the only variable, and it isn’t always decisive — talent depth matters at different thresholds depending on scale. For a broad, generalist global capability center (GCC) build, both Bengaluru and Hyderabad clear the bar, and the difference is closer to negotiating leverage on compensation than to availability.
Pune sits in a different bracket. It’s a genuine option for engineering and manufacturing-adjacent GCC roles, given the industrial base around it, and I’ve walked several manufacturing and automotive-adjacent clients through that evaluation. But I tell them plainly: Check headcount depth for the specific function before committing, because Pune’s bench thins out faster than Bengaluru’s or Hyderabad’s once you’re past a few hundred roles in a given specialization.
Infrastructure Is Less Visible Than Cost, but It Compounds
The infrastructure argument is real too, even though it doesn’t show up on a spreadsheet the way salary benchmarks do. When we built the case for Hyderabad in that T-Systems review over a decade ago, we pointed to the Outer Ring Road cutting airport-to-office travel to under 45 minutes and a newly top-rated international airport as reasons the city would keep pace with Bengaluru’s growing density problem.
Looking back, it’s held up better than most projections in that deck: Hyderabad’s occupancy costs have stayed among the lowest of the major GCC hubs in most years since, and the city keeps adding the kind of anchor MNC R&D tenants — Microsoft, Google, Amazon and Facebook’s first offshore development center outside the United States — that make it easier to hire and retain people used to working for employers like that.
What I’d Actually Tell a Company Weighing This Today
None of this is a case for Hyderabad over Bengaluru or Pune as a rule. What I’d tell a company today is closer to what changed my own thinking on the T-Systems project: Work out what you’re actually optimizing for before you rank cities.
If it’s speed and an existing hiring reputation, an acquisition or partnership route into an established local entity can outrun a from-scratch build in any city. If it’s raw talent depth at scale, Bengaluru’s market is still the deepest, and the premium you pay for it is the cost of that depth, not a market inefficiency. If it’s a specific technical function tied to manufacturing or engineering, Pune deserves a serious look but only after you’ve checked headcount depth for that exact role, not the city’s general reputation. And if compensation efficiency at scale is what matters most, Hyderabad remains, in our experience advising clients since, the city that gets that mix right most often.
The question worth asking isn’t “Which city is best for a GCC?” It’s “What am I actually trying to buy, and which city or which existing local entity sells it to me at the least risk?” That’s the question I had to answer with my own company’s name on the building, before I ever answered it as an advisor.
N. Sudheer (M.Com., FCS, LL.B) is a partner at A2 Consultants, a Hyderabad-based advisory firm specializing in cross-border India-entry structuring, GCC setup, FDI and FEMA compliance, and employer-of-record services for foreign companies. Before founding A2 Consultants, he served as a director of Click & Buy Services India Private Limited, the Indian arm of Deutsche Telekom’s T-Systems group, and has advised international businesses on company incorporation, tax, and regulatory structuring in India for more than 25 years. Visit www.a2consultants.in.